New Homeowner’s Insurance: Look for Discounted “Smart Home” Policies

Insurers are expected to offer deals for owning smart home products— should you consider revamping your policy?

IoT (Internet of Things) has taken the home front by storm. Products like smart connected thermostats, lights switches, and security sensors are becoming increasingly more commonplace in all types of residences, as the price of smart home devices continues to decline consumers’ familiarity of and appetite for the technology grows.

Research firm Gartner forecasts that 20.8 billion connected things will be in use worldwide by 2020—and it’s a movement that has industries, even those outside of the tech world, taking serious note. Insurance companies, in particular, are in a unique position to offer customers who add certain IoT devices to their homes special discounted rates on homeowner’s insurance.

Smart Products Provide Better Safety

Why? When devices within a home are able to communicate potential problems like flood, fire, and burglary to a homeowner’s smartphone, appropriate measures can be taken to protect the home, property, and belongings from theft and damage. The notification feature can save the homeowner, and the insurance company, thousands of dollars. Furthermore, IoT also can help insurance companies glean a clearer understanding of the steps you as a homeowner are taking to better protect your residence.

“Today, insurers calculate your risk and policy pricing by knowing your credit, your claims history, the type of house you live in and your location,” says Kevin Meagher, vice president of business development for ROC-Connect, a company that has developed a smart home solution specifically for insurers. “In the near future they are going to recognize that data delivered by IoT devices could paint a potentially different risk picture. If an insurer knows that you are able to respond more quickly, they equate that to mitigation of loss.”

IoT: A Game Changer for Insurance Companies

IoT stands to be a real game-changer for the insurance industry, yet few insurance companies have chosen to exploit the opportunity to attract new customers, reduce claims, improve customer engagement, and generate new revenues. One reason might stem from the fact that smart home technology is unfamiliar territory to an industry that has followed the same basic business model for dozens of years. According to an FC Business Intelligence survey, IoT has the potential to seriously disrupt the insurance industry, yet 50 percent of more than 300 companies say they lack a clear strategy for IoT implementation.

To help insurance companies ease into IoT, ROC-Connect has developed a home safety solution for insurers. Included in the kit are fire and water sensors and a hub which enables customers to monitor their homes remotely, and provide insurance companies with data that can help them recognize risk and reduce potential loses. According to Meagher the basic kit will cost less than $150, and customers will be able to add sensors depending on their needs and size of house. He expects insurance companies to bundle the kit with their homeowner’s insurance policies, although it’s still too early to tell how the distribution part of the puzzle will flush out. “We have only pulled the wrappers off the kit in mid-November, and are currently testing it in pilot programs with a few insurance companies,” Meagher says.

Insurers Embracing Technology

State Farm blazed the trail in 2013, when it announced that it would offer its insurance customers special promotions on the Lowe’s Iris Safe and Secure kit and the Iris Smart home kit, in addition to providing qualifying customers with discounts on their home insurance.

The Hartford insurance company appears to be moving in this direction, too. The Hartford Center for Mature Market Excellence and the MIT AgeLab recently interviewed a panel of experts on housing, aging, and technology from the fields of occupational therapy, interior design, computer science, gerontology and engineering, and a survey of homeowners to identify the top 10 smart home technologies that can make life easier, help with home maintenance, and enhance safety and security for homeowners over the age of 50.

The top 10 products are

Smart smoke and carbon monoxide detectors

Wireless doorbell cameras

Keyless entry

Automatic lighting

Smart water shutoff valves

Smart home security systems

Smart outlets/plugs

Smart thermostats

Water and/or mold monitoring sensors

Smart window blinds

Although The Hartford has no specific plans currently to offer smart home technology to its customers, according to Jodi Olshevski, executive director for The Hartford Center for Mature Market Excellence, the information will be used to educate consumers and offer guidance on the types of technologies that could provide them with many practical benefits. “We are excited about the technologies available today that can help homeowners be safer,” Olshevski says. “We are exploring a number of opportunities to impact insurance policies.”

As a way to demonstrate the impact of technology on the safety, convenience, and maintenance of a home, The Hartford created a digital smart home that consumers can access and view at their leisure. http://extramile.thehartford.com/home/smart-home

Nothing’s More Important Than Keeping Your Home Safe for Your Family

Security is one of the most popular electronic amenities for the smart home. Whether your system is programmed by a professional or you go it alone by using DIY home security products, a well-planned system can ensure peace of mind.

Our 14 point checklist will help determine if your house is a strong candidate for a professional security system.

Lisa Montgomery has been a member of the Electronic House editorial team for nearly 20 years; most of that time as the Editor. With a knack for explaining complex high-tech topics in terms that average consumers can understand, her style of writing resonates with people who are interested in addition electronic systems to their homes, but are unsure of the steps involved and the solutions available. From basic lighting control systems to full-blown automation systems, Lisa understands the home electronics market well, and is able to point consumers in the right direction on their quest for a smarter, more convenient, efficient and enjoyable home.
Over the years, she has developed close relationships with key manufacturers and seasoned custom electronics professionals, giving her a keen sense of what home technologies are hot now and what's on the horizon. She shares this wisdom regularly through feature stories, product roundups, case studies technology spotlights and comprehensive guides and books, which can be found on the Electronic House website, www.electronichouse.com.
Have suggestions or something you want to read about? Email Lisa at [email protected]

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